WEST'S® LEGAL FORMS

FOURTH EDITION

VOLUME 29

NONPROFIT ORGANIZATIONS

Mat #40175391

By

JAMES W. MARTIN James W. Martin, P.A. St. Petersburg, Florida

Member of the Florida Bar

Sections 25.1 to 25.999

THOMSON

* VVEST

©2004

By

WEST, A THOMSON BUSINESS

West, a Thomson business, has created this publication to provide you with accurate and authoritative information concerning the subject matter covered. However, this publication was not necessarily prepared by persons licensed to practice law in a particular jurisdiction. West is not engaged in rendering legal or other professional advice, and this publication is not a sub­stitute for the advice of an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.

you with accurate and rer, this publication was cular jurisdiction. West publication is not a sub­iert advice, you should

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PREFACE

Nonprofit enterprises have come a long way in this country since the 1700's when Benjamin Franklin showed their value by his work on a li­brary, university, hospital, fire company, and other institutions for com­munity improvement through social entrepreneurship.

In Florida alone, nonprofit corporations comprise over 10% of the 1 million active entities. In fact, there are almost as many nonprofit corpo­rations (109,000) in Florida as there are limited liability companies (140,349). Nonprofit enterprises have become a key part of the economy of the states and nation.

This Nonprofit Organizations volume includes forms, commentary and practice tips for the formation and operation of nonprofit organiza­tions by lawyers. While care has been taken in assembling these materi­als, it is important for the practicing lawyer to use them only as a start­ing point for his or her own research and practice.

The author dedicates this book to his wife, Cathy, and his grand­daughter, Zoey, and thanks his legal assistant Eileen Arsenault for her many years of work on this volume, and apologizes to the rest of his fami­ly for the nights and weekends away from them spent writing this book.

St. Petersburg, Florida July 24, 2004

*

JAMES W. MARTIN

III

TABLE OF CONTENTS

Volume 29

SPECIALIZED FORMS

CHAPTER 25. NONPROFIT ORGANIZATIONS

A. INTRODUCTION

25.1 The Nonprofit Organizations Concept. 25.2 Scope. 25.3 Introductory Comments. 25.4 Terminology. 25.5 Formation in General. 25.6 Structure of Nonprofit Corporations. 25. 7 Federal Tax-Exempt Status. 25.8 State and Local Tax-Exempt Status. 25.9 Stock vs. Non-stock. 25.10 Model Nonprofit Corporation Act. 25.11 State Nonprofit Corporation Laws. 25.12 Annual Report. 25.13 Charitable Solicitation Laws. 25.14 Secretary of State Mailing Addresses. 25.15 Secretary of State Web Sites. 25.16 Practical Hints and Procedures. 25.17 Selected Secondary Source Materials. 25.18 Selected Books and Periodicals.

B. FORMATION PROCEDURES

25.20 Starting Nonprofit Organizations. 25.21 Corporate Name. 25.22 Incorporation Procedure. 25.23 Incorporation Checklist. 25.24 Incorporation Worksheet.

C. ARTICLES OF INCORPORATION

25.30 Articles of Incorporation-In General. 25.31 __ Drafting Tips. 25.32 __ General Form. 25.33 __ State-Supplied Form-Alabama. 25.34 __ Alaska. 25.35 ____ Arizona-Tax-Exempt. 25.36 ______ Non-Tax-Exempt.

IX

25.37 25.38 25.39 25.40 25.41 25.42 25.43 25.44 25.45 25.46 25.47 25.48 25.49 25.50 25.51 25.52 25.53 25.54 25.55 25.56 25.57 25.58 25.59 25.60 25.61 25.62 25.63 25.64 25.65 25.66 25.67 25.68 25.69 25.70 25.71 25.72 25.73 25.74 25.75 25.76 25.77 25.78 25.79 25.80 25.81 25.82 25.83 25.84 25.85 25.86 25.87

X

TABLE OF CONTENTS

____ Arkansas. ____ California-Nonprofit Non.stock Public Benefit.

____ Nonprofit Non.stock Mutual Benefit. ______ Nonprofit Non.stock Religious.

Common Interest Development Association. __ Colorado.

____ Connecticut. Delaware.

__ D.C.-Supplied Form-District of Columbia. __ State-Supplied Form-Florida. ____ Georgia. ____ Hawaii.

Idaho. ____ Illinois.

Indiana. __ Basic Form-Iowa.

State-Supplied Form-Kansas. ____ Kentucky.

Louisiana. ____ Maine.

Maryland. ____ Massachusetts.

Michigan. ____ Minnesota. ____ Mississippi. ____ Missouri. ____ Montana. ____ Nebraska.

Nevada. ____ New Hampshire. ____ New Jersey. ____ New Mexico. ____ New York.

__ North Carolina. __ North Dakota. _Ohio.

Oklahoma. ____ Oregon. ____ Pennsylvania. ____ Rhode Island. ____ South Carolina. ____ South Dakota. ____ Tennessee.

__ Texas. Utah.

____ Vermont. ____ Virginia. ____ Washington. ____ West Virginia. ____ Wisconsin. ____ Wyoming.

I CONTENTS

l.

TABLE OF CONTENTS

25.88 25.89 25.90 25.91 25.92 25.93 25.94 25.95 25.96 25.97 25.98 25.99 25.100 25.101 25.102 25.103 25.104 25.105 25.106 25.107 25.108 25.109 25.110

Purposes and Powers Clauses-In General. Purposes Clause-General. Powers Clause-General. Tax-Exempt Purposes. Purpose-Employees' Club. __ Athletic Club. __ Civic League. __ Memorial Day Parade Committee. __ Political Club. __ Accountant's Association. __ Professional Artist's Association. __ Businessperson's Association. __ Labor Union. __ Arts Council. __ International Cultural Exhibition. __ Food Society. __ Trade Association. __ Aquarium. _Ballet. Amendment to Articles of Incorporation-In _General. __ General Form. __ General Form (Amending Articles in Their Entirety). __ Another Form.

D. BYLAWS

25.120 Bylaws-Generally. 25.121 __ General Form. 25.122 Bylaws for Nonprofit Corporation with Members (Tennessee). 25.123 Bylaws for Nonprofit Corporation Without Members (Tennessee). 25.124 Bylaw Provisions for Executive Committee. 25.125 Amendment to Bylaws-In General. 25.126 __ General Form.

E. ARTICLES OF INCORPORATION AND BYLAWS FOR SPECIFIC TYPES OF ORGANIZATIONS

25.130 Country Club-Articles of Incorporation. 25.131 __ Bylaws. 25.132 Swim Team-Articles of Incorporation. 25.133 __ Bylaws. 25.134 Trade Association (State)-Articles of Incorporation. 25.135 __ Bylaws. 25.136 Trade Association (Local Chapter)-Articles of Incorporation. 25.137 __ Bylaws. 25.138 Medical Foundation-Articles of Incorporation. 25.139 __ Bylaws. 25.140 ____ Alternate Form (Self-Perpetuating). 25.141 Church-Articles of Incorporation. 25.142 __ Bylaws. 25.143 Museum-Articles of Incorporation.

XI

25.144 25.145 25.146 25.147 25.148 25.149 25.150 25.151 25.152 25.153 25.154 25.155

25.160

25.161 25.162 25.163 25.164 25.165 25.166

25.170 25.171 25.172 25.173 25.174 25.175 25.176 25.177 25.178 25.179 25.180 25.181

·25.182 25.183 25.184 25.185 25.186 25.187 25.188 25.189 25.190 25.191 25.192 25.193

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TABLE OF CONTENTS

__ Bylaws. Homeowners Association-Articles of Incorporation. __ Bylaws. · Association of Corporations-Articles of Incorporation.

Bylaws. __ Designation of Representative. Cultural Exchange Corporation-Articles of Incorporation. __ Bylaws. Private Club-Articles of Incorporation. __ Bylaws. Marina-Articles of Incorporation. __ Bylaws.

F. ADDITIONAL ARTICLES AND BYLAWS FOR TAX-EXEMPT PURPOSES

Additional Articles and Bylaws for Tax-Exempt Purposes-In General.

Articles-Publicly Supported Organization. __ Supporting Organization. __ Private Foundation. Social Welfare Organization. Social Club. Bylaws of 501(c)(3) Corporation.

G. ORGANIZATIONAL MEETINGS

Organizational Meetings-In General. Standard Resolutions-In General. Standard Resolution-Incorporation. __ Bylaws. __ Seal.

Members. __ Election of Officers. __ Bank Accounts. __ IRS Tax Identification Number. __ Fiscal Year. __ Promoters' Acts. __ Registered Agent and Office. Optional Resolutions-In General. Optional Resolution-Federal Tax--Exempt Status. __ State and Local Tax Exempt Status.

Charitable Solicitation Registration. Loans to Corporation.

__ Licenses. __ Signs, Stationery, Etc .. __ Insurance. __ Trademarks. __ Copyrights. __ Lease of Realty.

Lease of Personalty.

TABLE

25.194 25.195 25.196 25.197 25.198 25.199 25.200 25.201 25.202 25.203 25.204 25.205 25.206 25.207 25.208 25.209 25.210 25.211 25.212

25.220 25.221 25.222 25.223 25.224 25.225

25.230 25.231 25.232

25.240 25.241 25.242 25.243 25.244 25.245

25.246

25.247

25.248

IS

CONTENTS

CEMPT

,oses-In

TABLE OF CONTENTS

25.194 __ Purchase of Tangible Personalty. 25.195 __ Legal Forms. 25.196 __ Employment Agreements. 25.197 __ Compensation. 25.198 __ Employees. 25.199 __ Single Member LLC Subsidiary. 25.200 __ Gill Acceptance Policy. 25.201 _ Ethics Policy. 25.202 By Incorporators-Notice of Organizational Meeting. 25.203 __ Waiver of Notice of Organizational Meeting. 25.204 __ Minutes of Organizational Meeting. 25.205 __ Ratification of Organizational Meeting. 25.206 __ Written Consent in Lieu of Organizational Meeting. 25.207 By Trustees-Notice of Organizational Meeting. 25.208 __ Waiver of Notice of Organizational Meeting. 25.209 __ Minutes of Organizational Meeting-Simple Form. 25.210 __ Minutes of Organizational Meeting-Detailed Form. 25.211 __ Ratification of Organizational Meeting. 25.212 __ Written Consent in Lieu of Organizational Meeting.

H. MINUTE BOOK

25.220 Minute Book-In General. 25.221 Authentication of Minute Book. 25.222 Authentication of Minutes and Documents Book-Another Form. 25.223 Table of Contents of Minute Book. 25.224 Membership Register. 25.225 Membership Certificate.

I. CORRESPONDENCE AND MISCELLANEOUS

25.230 Engagement Letter to Client. 25.231 Letter to Client With Copy of Filed Articles. 25.232 Letter to Client After Incorporation.

J. OPERATION

25.240 Sustaining Nonprofit Organizations. 25.241 Annual Meetings-In General. 25.242 __ Checklist. 25.243 Annual Meeting-Worksheet. 25.244 __ Members-Notice of Annual Meeting of Members. 25.245 ____ Call and Waiver of Notice of Annual Meeting of Mem-

bers. 25.246 Annual Meeting of Members-Minutes of Annual Meeting of

Members. 25.24 7 Annual Meeting-Members-Ratification of Annual Meeting of

Members. 25.248 __ Board of Trustees-Notice of Annual Meeting of Board of

Trustees.

XIII

25.249

25.250

25.251 25.252 25.253 25.254

25.255

25.256 25.257 25.258

25.259

25.260 25.261 25.262 25.263 25.264

25.265

25.266

25.267 25.268

25.269

25.270

25.271 25.272 25.273 25.274 25.275 25.276 25.277 25.278 25.279 25.280 25.281 25.282 25.283 25.284 25.285 25.286 25.287

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TABLE OF CONTENTS

__ Board of Directors-Call and Waiver of Notice of Annual Meeting of Board of Trustees.

__ Board of Trustees-Minutes of Annual Meeting of Board of Trustees.

____ Ratification of Annual Meeting of Board of Trustees. Special Meeting-Checklist. Special Meeting Worksheet. Special Meeting-Members-Notice of Special Meeting of Mem­

bers. ____ Call and Waiver of Notice of Special Meeting of Mem-

bers. __ Members-Minutes of Special Meeting of Members. ____ Ratification of Special Meeting of Members. __ Board of Trustees-Notice of Special Meeting of Board of

Trustees. ____ Call and Waiver of Notice of Special Meeting of Board of

Trustees. ____ Minutes of Special Meeting of Trustees. ____ Ratification of Special Meeting of Board of Trustees. Written Action in Lieu of Meeting-In General. __ By Members. Unanimous Written Action by Consent in Lieu of Meeting-By

Members. Unanimous Written Action by Consent in Lieu of Annual Meeting

of Members. Unanimous Written Action by Consent in Lieu of Special Meeting

of Members. Written Action in Lieu of Meeting-By Board of Trustees. Unanimous Written Action by Consent in Lieu of Annual Meeting

of Board of Trustees. Unanimous Written Action by Consent in Lieu of Special Meet­

ing-Board of Trustees. Written Action in Lieu of Meeting-By Members and Board of

Trustees, Jointly. Resolution-Change of Name. __ Amend Articles of Incorporation. __ Amend Bylaws. __ Bank Account Signatures Changed. __ Registered Agent and Office Changed. __ Resignation. __ Election to Fill Vacancy. __ Major Purchases. __ Approval of Contract.

Ratification of Action. __ Investment Broker Account. __ Policy Review. __ Assessment. __ Mortgage. __ Funds Policy. __ No Nepotism. Annual Reports to State.

-TABLE OF CO

25.300 25.301 25.302 25.303 25.304 25.305 25.306

25.307 25.308 25.309 25.310 25.311 25.312 25.313 25.314 25.315 25.316 25.317 25.318

25.330 25.331

25.332 25.333 25.334 25.335 25.336 25.337 25.338 25.339 25.340 25.341 25.342 25.343 25.344 25.345 25.346 25.347 25.348 25.349 25.350 25.351 25.352 25.353 25.354

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TABLE OF CONTENTS

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25.300 Changing Nonprofit Organizations. 25.301 Reincorporation-In General. 25.302 __ Certificate of Reincorporation. 25.303 Merger-In General. 25.304 __ Articles of Merger. 25.305 ____ Another Form. 25.306 Plan and Certificate of Merger of Business and Not-for-Profit

Corporation (New York). 25.307 Dissolution-In General. 25.308 __ Engagement Letter. 25.309 __ Petition. 25.310 -- Order to Publish Notice. 25.311 -- Notice of Dissolution. 25.312 __ Letter to Newspaper to Publish Notice. 25.313 __ Letter to Client With Notice. 25.314 __ Final Judgment of Dissolution. 25.315 __ Letter to Client With Judgment. 25.316 __ State-Supplied Form of Articles of Dissolution (Florida). 25.317 Domestication-In General. 25.318 __ Certificate of Domestication (Florida).

25.330 25.331

25.332 25.333 25.334 25.335 25.336 25.337 25.338 25.339 25.340 25.341 25.342 25.343 25.344 25.345 25.346 25.347 25.348 25.349 25.350 25.351 25.352 25.353 25.354

L. FOREIGN QUALIFICATION

Foreign Qualification-In General. Foreign Qualification Application-State-Supplied Form-Ala-

bama. __ Alaska. ____ Arizona. __ Arkansas. ____ California. ____ Colorado. ____ Connecticut. ____ Delaware. ____ District of Columbia. ____ Florida. ____ Georgia. ____ Hawaii. __ Idaho. -- __ Illinois. ____ Indiana. ____ Iowa. ____ Kansas. -- __ Kentucky. -- __ Louisiana.

__ Maine. - _ Maryland: -- __ Massachusetts. -- __ Michigan. -- __ Minnesota.

xv

25.355 ____ Mississippi. 25.356 ____ Missouri. 25.357 ____ Montana. 25.358 ____ Nebraska. 25.359 ____ Nevada. 25.360 ____ New Hampshire. 25.361 ____ New Jersey. 25.362 ____ New Mexico. 25.363 ____ New York. 25.364 ____ North Carolina. 25.365 __ NorthDakota. 25.366 __ Ohio. 25.367 __ Oklahoma. 25.368 ____ Oregon. 25.369 ____ Pennsylvania. 25.370 ____ Rhode Island. 25.371 ____ South Carolina. 25.372 ____ South Dakota. 25.373 ____ Tennessee. 25.374 ____ Texas. 25.375 __ Utah. 25.376 ____ Vermont. 25.377 ____ Virginia. 25.378 __ Washington. 25.379 ____ WestVirginia. 25.380 ____ Wisconsin. 25.381 ____ Wyoming.

TABLE OF CONTENTS

M. STAKEHOLDERS: MEMBERS, TRUSTEES, OFFICERS, EMPLOYEES, FUNDERS, AND CLIENTS

25.390 Stakeholders, Strategy and Accountability of Nonprofit Organiza-tions.

25.391 Employment Agreement. 25.392 Resignation. 25.393 Proxy by Member. 25.394 __ Another Form. 25.395 Member's Regular and Absentee Ballot. 25.396 Attorney's Response to Auditor's Request for Information.

N. DEVELOPMENT

25.420 Development in Nonprofit Organizations. 25.421 Pledge Agreement. 25.422 Major Pledge Agreement. 25.423 Pledge to Guaranty Loan. 25.424 Donated Work for Hire Agreement. 25.425 Assignment of Ownership of Art. 25.426 Lease for $1 a Year-Short Form. 25.427 __ Long Form. 25.428 Lease of City Parking Lot.

XVI

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TABLE OF CONTENTS

25.429 License Agreement for Use of Community Center.

0. TAX-EXEMPT STATUS

25.440 Tax-Exempt Status-In General. 25.441 __ Federal Income Tax-In General. 25.442 ____ Publicly-Supported Organization. 25.443 ____ Private Foundations. 25.444 __ State Income Tax. 25.445 __ State Sales Tax. 25.446 __ State and Local Property Taxes. 25.447 __ Federal Tax Identification Number. 25.448 __ Annual Returns. 25.449 _ IRS Publication 4220-Applying for 501(c)(3) Tax-Exempt

Status. 25.450 __ IRS Package 1023-Application for Recognition of Exemp-

tion. 25.451 __ IRS Publication 557-Tax-Exempt Status for Your Organiza-

tion. 25.452 __ IRS Publication 4221-Compliance Guide for 501(c)(3) Tax-

Exempt Organizations. 25.453 __ IRS Form 990-Return of Organization Exempt From In-

come Tax. 25.454 __ IRS Publication 598-Tax on Unrelated Business Income of

Exempt Organizations. 25.455 __ IRS Publication 526-Charitable Contributions.

Page

Table of Laws and Rules-------------------------------------------------------- 767 In.dex ------------------------------------------------------------------------------------- 773

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